Business Acquisitions

The Company uses acquisitions as a strategy to grow its customer base by increasing its presence in new and existing markets, expand and diversify its service offerings, enhance its technology, and acquire skilled personnel.

The Company completed the following acquisitions during the first three months of fiscal 2019, paying the purchase price in cash in each transaction: (a) an asset purchase of iContact, LLC, acquired on January 22, 2019, a North Carolina-based provider of email marketing solutions; (b) a share purchase of the entire issued capital of Safe Send AS, acquired on March 29, 2019, a Norwegian-based provider of email security solutions; and (c) other immaterial acquisitions of online data backup businesses.

The condensed consolidated statement of income since the date of each acquisition and balance sheet as of March 31, 2019, reflect the results of operations of all 2019 acquisitions. For the three months ended March 31, 2019, these acquisitions contributed $4.7 million to the Company’s revenues. Net income contributed by these acquisitions was not separately identifiable due to j2 Global’s integration activities and is impracticable to provide. Total consideration for these transactions was $60.6 million, net of cash acquired and assumed liabilities and is subject to certain post-closing adjustments which may increase or decrease the final consideration paid.

The following table summarizes the allocation of the purchase consideration for these acquisitions (in thousands):



Assets and Liabilities		Valuation
Accounts receivable	$	568
Prepaid expenses and other current assets		161
Property and equipment		1,887
Trade names		2,200
Customer relationships		17,504
Goodwill		37,397
Trademarks		696
Other intangibles		3,838
Other long-term assets		58
Accounts payable and accrued expenses		(132	)
Deferred revenue		(3,575	)
Total	$	60,602

During the three months ended March 31, 2019, no purchase price accounting has been finalized related to acquisitions that were completed during the first quarter of 2019 or to the prior year’s acquisitions for which the purchase accounting was preliminary at December 31, 2018. The initial accounting for all 2019 acquisitions is incomplete and subject to change, which may be significant. j2 Global has recorded provisional amounts which may be based upon past acquisitions with similar attributes for certain intangible assets (including trade names, software and customer relationships), preliminary acquisition date working capital and related tax items.

During the three months ended March 31, 2019, the Company recorded adjustments to the initial working capital related to prior period acquisitions in the Digital Media business, which resulted in a net decrease in goodwill of $1.5 million (see Note 7 - Goodwill and Intangible Assets). Such adjustments had an immaterial impact on the amortization expense within the condensed consolidated statement of income for the three months ended March 31, 2019.

Goodwill represents the excess of the purchase price over the fair value of the net tangible and identifiable intangible assets acquired and represents intangible assets that do not qualify for separate recognition. Goodwill recognized associated with these acquisitions during the three months ended March 31, 2019 is $37.4 million, of which $33.2 million is expected to be deductible for income tax purposes.